Mercari Inc (JP:4385)
:4385
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Mercari
(4385)
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Rating:63Neutral
Price Target:
¥4,185.00
▲(16.19% Upside)
Action:DowngradedDate:02/11/26
The score is primarily constrained by weak cash generation (negative operating and free cash flow) and elevated leverage despite strong margin recovery. Technicals are supportive with a clear uptrend and positive momentum, while valuation appears reasonable at ~18x earnings but lacks dividend support.
Positive Factors
Strong unit economics and margin recovery
Sustained high gross margins and recently improved operating/net margins indicate durable unit economics for the marketplace. Over the next several months this supports profit resilience even with slower top-line growth, enabling reinvestment or margin-led earnings stability.
Negative Factors
Negative operating and free cash flow
Persistent negative OCF and FCF mean reported profits are not converting into cash, raising quality-of-earnings concerns. Over a 2-6 month horizon this limits internal funding for growth, increases dependence on external financing and constrains strategic flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong unit economics and margin recovery
Sustained high gross margins and recently improved operating/net margins indicate durable unit economics for the marketplace. Over the next several months this supports profit resilience even with slower top-line growth, enabling reinvestment or margin-led earnings stability.
Read all positive factors
Mercari (4385) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥594.22B
Dividend YieldN/A
Average Volume (3M)3.05M
Price to Earnings (P/E)23.3
Beta (1Y)0.54
Revenue Growth4.83%
EPS Growth106.29%
CountryJP
Employees2,080
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)33.98
Shares Outstanding164,970,500
10 Day Avg. Volume3,724,380
30 Day Avg. Volume3,051,140
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)4.42
Price to Sales (P/S)2.28
P/FCF Ratio-35.84
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥3,953.19Price Target Upside9.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)163.6
Revenue Forecast (FY)¥217.29B
Mercari Business Overview & Revenue Model
Company Description
Mercari, Inc. engages in the planning, development, and operation of the Mercari marketplace applications in Japan and the United States. Mercari, Inc. was incorporated in 2013 and is based in Tokyo, Japan....
How the Company Makes Money
Mercari primarily makes money by charging fees tied to transactions on its marketplace(s). Its core revenue stream is marketplace monetization, where the company earns revenue when items are successfully sold (typically via seller transaction/comm...
Mercari Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in profitability and technological integration, particularly in the Fintech and cross-border transactions segments. However, there are notable challenges with revenue growth and GMV, especially in the Marketplace and U.S. segments, indicating areas for improvement.Positive Updates
Record High Core Operating Profit
Core operating profit reached JPY 27.5 billion, significantly exceeding the forecast, representing a 46% year-on-year growth.
Negative Updates
Revenue Growth Challenges
Revenue came in at JPY 192.6 billion, falling short of the forecast due to a slowdown in the growth of the marketplace and U.S. businesses, with a 3% increase year-on-year.
Read all updates
Q4-2025 Updates
Positive
Negative
Record High Core Operating Profit
Core operating profit reached JPY 27.5 billion, significantly exceeding the forecast, representing a 46% year-on-year growth.
Read all positive updates
Company Guidance
During Mercari's FY 2025 Full Year Financial Results Presentation, key performance metrics were highlighted. The company reported a core operating profit of JPY 27.5 billion, surpassing forecasts, with a revenue of JPY 192.6 billion, which, despite being below expectations, still marked a record high. The marketplace, Fintech, and U.S. segments all achieved profitability for the first time, with cross-border transaction GMV over JPY 90 billion and Mercard issuances exceeding 5 million. Looking forward to FY 2026, Mercari anticipates revenue growth of 4% to 9%, aiming for a core operating profit between JPY 28 billion and JPY 32 billion. The company plans to invest in AI and capitalize on its credit business, targeting a CAGR of over 25% in core operating profit compared to FY 2024. Additionally, the Fintech segment saw a significant core operating profit rise to JPY 4.5 billion, driven by a 32% growth in the credit balance. The U.S. business also achieved profitability with a JPY 900 million operating profit. Mercari continues to focus on being an AI-native company, enhancing user experiences, and strengthening its product offerings across all segments.Mercari Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
52
Neutral
Cash Flow
28
Negative
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 204.73B | 192.63B | 187.41B | 171.97B | 147.05B | 106.11B |
| Gross Profit | 149.47B | 138.26B | 129.73B | 113.96B | 95.14B | 81.80B |
| EBITDA | 38.84B | 29.41B | 20.91B | 19.45B | -2.87B | 6.06B |
| Net Income | 29.32B | 26.11B | 13.46B | 13.11B | -7.57B | 5.72B |
Balance Sheet | ||||||
| Total Assets | 615.14B | 543.76B | 501.77B | 418.35B | 339.86B | 262.53B |
| Cash, Cash Equivalents and Short-Term Investments | 159.05B | 147.03B | 192.00B | 201.82B | 211.41B | 171.46B |
| Total Debt | 234.16B | 199.38B | 193.31B | 160.55B | 134.18B | 71.33B |
| Total Liabilities | 503.90B | 444.12B | 429.62B | 362.69B | 301.86B | 222.51B |
| Stockholders Equity | 110.89B | 99.27B | 71.84B | 55.35B | 37.68B | 39.63B |
Cash Flow | ||||||
| Free Cash Flow | -21.13B | -12.25B | -43.49B | -36.40B | -26.89B | 2.95B |
| Operating Cash Flow | -20.24B | -11.95B | -43.34B | -35.82B | -26.22B | 3.37B |
| Investing Cash Flow | -53.34B | -31.36B | -877.00M | -601.00M | -671.00M | 6.91B |
| Financing Cash Flow | 48.87B | 504.00M | 32.09B | 25.17B | 62.06B | 19.77B |
Mercari Technical Analysis
Positive
3602.00
Price Trends
3535.08
Positive
3247.74
Positive
2811.86
Positive
Market Momentum
77.38
Positive
46.90
Neutral
17.68
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4385, the sentiment is Positive. The current price of 3602 is below the 20-day moving average (MA) of 3691.40, above the 50-day MA of 3535.08, and above the 200-day MA of 2811.86, indicating a neutral trend. The MACD of 77.38 indicates Positive momentum. The RSI at 46.90 is Neutral, neither overbought nor oversold. The STOCH value of 17.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4385.
Mercari Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | ¥41.00B | 14.03 | ― | 2.19% | 17.90% | 14.14% | |
74 Outperform | ¥33.41B | 5.26 | ― | 1.73% | ― | ― | |
65 Neutral | ¥217.09B | 27.65 | ― | 0.64% | 57.01% | 91.03% | |
63 Neutral | ¥594.22B | 23.34 | 31.11% | ― | 4.83% | 106.29% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | ¥72.49B | 4.34 | ― | 1.81% | 6.48% | -38.41% | |
49 Neutral | ¥1.49B | -9.68 | ― | ― | -0.97% | -6.95% |
* Consumer Cyclical Sector Average
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Mercari Corporate Events
Mercari Lifts Full-Year Revenue and Profit Outlook on Strong Marketplace Performance
Feb 9, 2026
Mercari has raised its full-year revenue and core operating profit forecasts for the fiscal year ending June 30, 2026, citing stronger-than-expected performance in its marketplace business. The company now projects revenue of ¥210 billion to ...
Mercari Lifts Full-Year Outlook After Profit Surge in First Half of FY2026
Feb 9, 2026
Mercari reported strong results for the six months ended December 31, 2025, with revenue rising 12.8% year-on-year to ¥106.3 billion and core operating profit surging 80.9% to ¥20.2 billion, reflecting improved profitability. Profit attr...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.